In 2004, several major downtown organizations released the Houston Downtown Framework. One of the four key components defining success is a residential population of 20,000 by 2025.

Unfortunately, in the past six years we have only seen two new residential projects built and only one of those was new construction.

Why is that, especially when (as stated in the Chronicle's March editorial, "Ease up on subsidies") we have public improvements in place downtown such as sports stadiums, theater venues, dining and entertainment options, new park spaces and a multitude of transportation options? Shouldn't these public improvements be incentive enough for developers? Clearly, the residential development numbers through 2010 prove that public improvements alone are not incentive enough.

The panel recognized, however, that without public incentives, land values west of U.S. 59 are prohibitively expensive for the type of residential product that would be in greatest demand. With incentives, the projects are not only doable, but they are a means of protecting, enhancing and maximizing the value of the significant public and private investments that have already been made in the area.

Our follow-up research found that net development costs to build downtown are higher compared to other equivalent markets within the central city; we estimated a cost difference of $23,000 per door. Given these higher costs, creating a viable downtown housing market cannot be accomplished by the private sector alone. As a solution to combat the disparity between development costs and market conditions, the city of Houston, Downtown District and Downtown Redevelopment Authority created the Downtown Living Initiative, a program that incorporates financial and other benefits to assist in the development of mixed use residential development.

In August 2012, the City Council approved the district's program and capped it at 2,500 units by June 30, 2016. Based on the proven interest in the program and to continue momentum, we are asking the council to raise this cap from 2,500 units to 5,000 units for the combined program area. The cutoff date would not change, nor would the financial incentive.

It's important to note that these projects will be generating tax revenue for the city the calendar year after they open their doors, and that the reimbursement to developers will be coming from the new tax revenue paid by the developer. Moreover, having a stronger residential base will then increase the value of office, hotel and other types of properties that will generate new tax revenue for the city that can support improvements not only in downtown but also in Houston neighborhoods.

Plus, residents living downtown save the city and other public agencies money on infrastructure and transportation costs.

It's also important to note that the Downtown Living Initiative requires developers to comply with essential guidelines that aid in creating supportive urban design with residential streets featuring street trees, enhanced lighting, active ground-floor uses and appropriate sidewalk design.

We know that more and more people want to live in the urban core with amenities and services within walking distance such as shopping, entertainment, park spaces and access to public transportation, especially the 25-34-year-olds with a four-year college degree.

Even our target number of 20,000 residents is far below cities that are considered vibrant and walkable: New York (65,700), Chicago (53,800), Philadelphia (57,200), Washington, D.C. (28,200) and Los Angeles (21,100).

Today, there are 2,614 residential units in downtown with approximately 3,600 residents. Downtown provides opportunities to own your home or rent, and the new housing coming online is a diversity of projects from mid-rise to high-rise with varying price points.

In fact, if not for the incentives we are advocating, residential rental rates would be so high in order for the project to make financial sense, no one could afford to live in them except for the very wealthy. That is not what we want.

We want downtown Houston to be a bustling neighborhood where people live and work - this is the future of development in Houston as well as in cities across the country.

We continue to hear that development in downtown Houston is not feasible but for the incentives being provided through the Downtown Living Initiative.

The City Council's approval of increasing the program's unit cap from 2,500 to 5,000 will put us on track in creating the vibrant 24/7 pedestrian environment that was laid out in the 2004 Downtown Framework.

Henderson is board chairman of the Downtown District. Peña is board chairman of the Downtown Redevelopment Authority.